Auditors say the nonprofit group’s president used the League’s credit card for questionable spending.

The president of the Urban League of Portland is under
scrutiny by county auditors for more than $44,000 of questionable
spending.

Over the past 2½
years, Urban League President Marcus C. Mundy has used the
organization’s credit card for what auditors say are expenditures with
no clear relationship to the nonprofit’s mission, according to documents
obtained by WW under the state’s public records law.

The records show that since 2009, auditors have been pushing Mundy and the Urban League to explain his spending.

Long after auditors
requested explanations, Mundy provided receipts for grocery purchases at
Costco, Safeway and Fred Meyer; clothes at Target; his children’s
cellphone bills and fundraisers at their private school.

He also submitted
receipts for a March 2009 trip to Beijing, a $108 receipt dated May 2009
for “human hair,” and many other puzzling expenses.

Mundy acknowledges he has made mistakes.

“I did not spend
enough time on administrative and operational issues,” he says. “But I
absolutely did not use the Urban League [credit] card for personal
expenses.”

His attempts to provide documentation has not satisfied the county nor the Urban League’s own independent auditors.

“There was no
documentation for the business purpose of these charges in most cases,”
the Urban League’s auditors wrote six months ago.

One county report, dated Nov. 7, 2011, said the records Mundy recently provided were so incomplete as to be “not auditable.”

Records show the
Urban League’s board approved most of Mundy’s spending after the
fact—but only after county reviews raised serious questions. And it did
so despite the organization’s independent auditor warning that the
president’s credit-card use could invite an investigation by the
Internal Revenue Service.

Urban League Board
Treasurer Charles Wilhoite, who says he’s speaking for the board,
acknowledges that the organization’s record-keeping has been sloppy. He
says the board is pushing hard for an improved administrative
performance from Mundy.

Wilhoite also says the Urban League’s financial health is sound, and the board still supports Mundy.

“Everybody has total confidence in his ability to continue to lead the League,” Wilhoite says.

Urban League chairman
Lolenzo Poe recently went on the offensive against the county’s efforts
to hold the organization’s board accountable.

“We regret that you
concluded that deficiencies remained at the time of your audit,” Poe
wrote the county Oct. 6. “But the existence of those deficiencies is not
appropriately attributed to any failure or inattention by the Urban
League of Portland Board.” (Poe did not return WW’s calls seeking comment.)

Multnomah County
officials say they have run out of patience and may cut off funding to
the Urban League as early as next week unless it comes up with an
oversight plan.

“Multnomah County takes its role as the steward of taxpayer dollars very seriously,” says county spokesman Dave Austin.

In Portland, the
Urban League, whose local chapter was founded in 1945, provides social
services for African-American seniors and runs after-school programs for
low-income kids.

The county has paid
the Urban League $729,000 over the past three years under a contract to
provide services. County money accounts for more than 20 percent of the
League’s $1 million annual budget.

The Urban League of
Portland has encountered financial problems before. In the late 1980s,
financial irregularities at the League led to a crushing $400,000 debt
and organizational turmoil. Auditors blamed the League’s board for
failure to monitor the spending of then-CEO Herb Cawthorne.

In 1999, the League
again nearly went bust after financial mismanagement by then-CEO
Lawrence Dark. Under pressure from Multnomah County and other funders,
the board ousted Dark.

Mundy, 53, a Los
Angeles native, moved to Portland in 2000 when his late wife took a job
at Nike. He worked in risk management for the accounting firm KPMG and
later became a vice president and regional compliance officer for Kaiser
Permanente. He is a graduate of Howard University and the University of
Oregon’s executive MBA program.

Shortly after
arriving in Portland, Mundy joined the Urban League board. After Dark’s
successors restored the Urban League’s financial health, a 2006 county
fiscal review gave the League its highest rating—1 out of a possible 4.

Mundy took over as
president and CEO in 2006, and now earns $91,000 annually, records show.
Despite Mundy’s background, however, the League’s financial controls
broke down under his leadership.